This question introduces you to the concept of an annuity with growth. The formulae is given on p$\mathrm{.}3,$ equation $(7),$ of the Note on Formulae, but I would encourage you to try doing it in Excel as well. $($If the first cash flow is C$,$ the next one will be C$(1+$g$),$ and so on$,$ where g is the growth rate in cash flow$).$ As an example, the present value of an annuity that starts one year from now at $$100,$ and grows at $5\%,$ with the last cash flow in year $10,$ when the discount rate is $7\%,$ is $$860.$ Confirm this before attempting the problem using both the formula and excel. What is the NPV of a new manufacturing project that costs $$107,000$ today, but has a cash flow of $$16,000$ in year $1$ that grows at $6\mathrm{.}0\%$ per year with the final cash flow in year $12?$ Similar investments earn $7\mathrm{.}9\%$ per year.